InMed Pharmaceuticals Inc

Current report

Reference is made to Part I, Item 1A, “Risk Factors” included in the 2024 Annual Report for information concerning risk factors, which should be read in conjunction with the factors set forth in “Cautionary Statement Regarding Forward-Looking Statements” of this Report. There have been no material changes with respect to the risk factors disclosed in our 2024 Annual Report, except as set forth below. You should carefully consider such factors in the 2024 Annual Report, and below, which could materially affect our business, financial condition or future results. The risks described in the 2024 Annual Report and below, are not exhaustive and therefore, there are additional risks facing the Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially and adversely affect our business, financial condition and/or operating results.

Current report

Any actual or threatened delisting of our securities by Nasdaq could have a material and adverse effect on our business, operations and financial condition, and could, among other things, limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.

Current report

As previously reported by the Company, on March 19, 2024, the Company received written notification from the Listing Qualifications Department of Nasdaq that the Company has been granted an additional 180-day compliance period, or until September 16, 2024 (the “Extended Compliance Period”), to regain compliance with Nasdaq’s minimum bid price requirement for the continued listing on Nasdaq, as set forth in Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Price Rule”). Nasdaq’s determination was based on the Company meeting the continued listing requirement for market value of publicly held shares and all other applicable requirements for initial listing on Nasdaq, with the exception of the bid price requirement, and the Company’s written notice of its intention to consider all available options to regain compliance during the Extended Compliance Period, including, if necessary, effecting a reverse stock split. The Company was unable to regain compliance during the Extended Compliance Period and on September 17, 2024, the Company received an additional notification from the Listing Qualifications Department stating that due to the deficiency, the Company’s securities would be delisted from Nasdaq on September 26, 2024, unless the Company appealed Nasdaq’s determination to a Hearings Panel (the “Panel”). A hearing request would stay the suspension of the Company’s securities pending the Panel’s discussion. On September 17, 2024, the Company submitted the hearing request to appeal (the “Appeal Request”) Nasdaq’s determination before the Panel.

Current report

On November 14, 2024, the Company effected a reverse stock split of the Common Shares at a ratio of 20-to-1 (the “Reverse Stock Split”). Trading of the Common Shares on Nasdaq on a split-adjusted basis began as of November 14, 2024. As a result of the Reverse Stock Split, every twenty shares of Common Shares were combined into one Common Share, and the total number of Common Shares outstanding were reduced from approximately 14,361,550 Common Shares to approximately 718,032 Common Shares. No fractional Common Shares were issued if, as a result of the Reverse Stock Split, a registered shareholder would otherwise become entitled to a fractional share. Instead, shareholders who otherwise were entitled to receive fractional Common Shares because they held a number of Common Shares not evenly divisible by the ratio of the Reverse Stock Split were automatically entitled to receive an additional Common Share. In other words, any fractional share will be rounded up to the nearest whole number.

Current report

While the Company has effected the Reverse Stock Split, there can be no assurances, however, that we will be successful in regaining compliance with the continued listing requirements and maintaining the listing of our Common Shares on Nasdaq. Delisting from Nasdaq could materially and adversely affect our ability to raise additional financing through the public or private sale of equity securities, would significantly affect the ability of investors to trade our securities and would negatively affect the value and liquidity of our securities, including our Common Shares. The actual or threatened delisting of our securities could also have other material and adverse consequences, including the potential loss of confidence by employees and other stakeholders, the loss of institutional investor interest and fewer business development opportunities, limited availability of market quotations for our securities, reduced liquidity with respect to our securities, a determination that our Common Shares is “penny stock,” which will require brokers trading in shares of our Common Shares to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for our Common Shares, and limited amount of news and analyst coverage of the Company. To the extent that our Common Shares became eligible to trade on the OTC Bulletin Board, another over-the-counter quotation system, or on the pink sheets, an investor may find it more difficult to dispose of their Common Shares or obtain accurate quotations as to the market value of our Common Shares.

Current report

Furthermore, the National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” Because our Common Shares are currently listed on Nasdaq, such securities will be deemed covered securities. Although the states will be preempted from regulating the sale of our securities, the federal statute does allow states to investigate companies if there is a suspicion of fraud and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case. Additionally, if we were no longer listed on Nasdaq, our securities would not be covered securities and we would be subject to regulations in each state in which we offer our securities.

Current report

The Reverse Stock Split may not increase the price of our Common Shares and have the desired effect of maintaining compliance with the Minimum Bid Price Rule.

Current report

While the Company’s Board of Directors expects that the Reverse Stock Split will sufficiently increase the market price of our Common Shares so that we are able to regain and maintain compliance with the Minimum Bid Price Rule and the Nasdaq Listing Rules more generally, the effect of the Reverse Stock Split upon the market price of our Common Shares cannot be predicted with any certainty, and the history of similar reverse stock splits for companies in like circumstances is varied. The price per share of our Common Shares may not reflect the exchange ratio implemented by the Company’s Board of Directors and the price per share following the effective time of the reverse stock split may not be maintained for any period of time following the Reverse Stock Split. Under applicable Nasdaq rules, to regain compliance with the $1.00 minimum closing bid price requirement and maintain our listing on Nasdaq, the $1.00 closing bid price must be maintained for a minimum of ten consecutive trading days. Accordingly, the Company cannot assure you that we will be able to maintain our Nasdaq listing, even though the Reverse Stock Split has been made effected, or that the market price per share will exceed or remain in excess of the $1.00 minimum bid price for a sustained period of time.

Current report

We continue to monitor the Company’s Common Shares price, however, it is possible that the per share price of our Common Shares will not rise in proportion to the reduction in the number of shares of our Common Shares outstanding resulting from the Reverse Stock Split, and the market price per post-Reverse Stock Split share may not exceed or remain in excess of the $1.00 minimum bid price for a sustained period of time, and the Reverse Stock Split may not result in a per share price that would attract brokers and investors who do not trade in lower priced stocks. Notwithstanding the effectiveness of the Reverse Stock Split, the market price of our Common Shares may decrease due to factors unrelated to the Reverse Stock Split, and the market price of our Common Shares may also be based on other factors which may be unrelated to the number of Common Shares outstanding, including our future performance. If the trading price of our Common Shares declines, the percentage decline as an absolute number and as a percentage of our overall market capitalization may be greater than would occur in the absence of the Reverse Stock Split.

Current report

The Reverse Stock Split may decrease the liquidity of our Common Shares.

Current report

The liquidity of our Common Shares may be harmed by the Reverse Stock Split effected by the Company on November 14, 2024 given the reduced number of Common Shares that are outstanding after the Reverse Stock Split, particularly if the Common Share price does not increase as a result of the Reverse Stock Split. In addition, investors might consider the increased proportion of unissued authorized shares of Common Shares to issued shares to have an anti-takeover effect under certain circumstances, because the proportion allows for dilutive issuances which could prevent certain shareholders from changing the composition of the Board of Directors or render tender offers for a combination with another entity more difficult to successfully complete. The Board of Directors does not intend for the Reverse Stock Split to have any anti-takeover effects.

Previous report

As a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and in Item 10(f)(1) of Regulation S-K, we are electing scaled disclosure reporting obligations and therefore are not required to provide the information requested by this item. For a discussion of our potential risks and uncertainties, please review the risks and uncertainties described in “1A. Risk Factors” in the 2023 Annual Report.